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The 200-Page Decision
From a modern perspective, one of the most obscure intervals in Tennessee history is the period after the adoption of the Constitution of 1870, in which the settlement of the state debt was a bitterly divisive issue. By way of background, the state first issued bonds in 1832. Substantial debt began to to be incurred in 1852, as Tennessee, like other states, provided public support for railroad projects. Other money was borrowed for completion of the Capitol, for purchasing Andrew Jackson's home, the Hermitage, and to erect buildings on the state fairgrounds. By 1860, the debt was at $20,898,606 — almost 70 percent for railroad construction.
The adverse economic consequences of the Civil War almost halved the value of taxable property in Tennessee, value that was not fully restored until 1892. Gov. William G. ("Parson") Brownlow's radical government ran up another $14 million in railroad debt. The state suffered not only from a decline in property values, but also delinquent taxes, unprecedented expenses, and substantial issues of bribery and fraud in those tumultuous years. As a result, the Constitution of 1870 included a clause (Art. II, Sec. 33) that prevented the credit of the state from being used for a railroad in default on previous state debt.
The issue of how to repay this enormous debt (owed primarily to investors in New York) festered until 1881, splitting the rejuvenated postwar Democratic Party into "state credit" and "low tax" wings. The ensuing divided effort led to the election of Republican Alvin Hawkins in 1880 and the passage in 1881 of a bill to repay 100 percent of $27 million of the debt by the issuance of 3-percent coupon bonds, which were "receivable for all taxes and debts due the State of Tennessee." A suit was filed in the Chancery Court of Davidson County and dismissed, and the dismissal was appealed to the Supreme Court. As noted by Chattanooga attorney William G. Frierson in a speech at the 1900 Tennessee Bar Association convention,
[P]erhaps no case has been before our courts in which the whole people took so lively an interest. The question had been so long in controversy that the position of every public man, including the Judges, as to whether the settlement was a wise one, was well known."
According to Frierson, there were three state credit judges on the court as opposed to two low tax proponents. While there was more than one issue, the eventual ruling in Lynn v. Polk, 76 Tenn. 121 (1881) was that the law was unconstitutional because the coupons limited the ability of future legislatures to allocate state funds. Reflecting the intense controversy, the five judges together generated more than 200 pages of opinions. Justice Robert McFarland, a state credit man, voted with the two low taxers to strike the funding provision down. In his ruling, McFarland aptly observed:
No case of greater importance, I suppose, has ever been presented to this court; and no case has probably ever been argued before it more thoroughly or with more learning and ability. It demands a most earnest, careful and deliberate consideration by each member of the court. It indirectly involves political questions upon which the people of the State have been divided, and in regard to which deep feeling exists. As citizens of the State, the members of the court are not supposed to be entirely without such opinions upon these questions as may more or less affect their judgments; but the stronger instinct of every fairly educated and fairly balanced judicial mind is that sound principles of law shall be maintained. The bill presents certain well-defined legal questions. We have only to respond to these questions from a judicial standpoint, and as far as possible in a judicial spirit, and our duties are performed.
While another effort was made to fund the debt, the low taxers soon gained control of the majority Democratic Party, and after the 1882 elections, the debt was repudiated by half, with the bonds payable at 50 percent of par with a 3-percent interest rate. Thus resolved, the issue eventually faded into obscurity.
While there are many lessons that can be learned from the state debt controversy and Lynn v. Polk, two immediately strike me. First, even the nastiest of political disputes goes away sooner or later, and even can be forgotten, which is encouraging in our current era of bad feelings. Second, divisive politics cannot be allowed to sway judges or lawyers from their duty to interpret the law fully and fairly. Justice McFarland remains an outstanding example of a jurist who overcame his own political views to maintain "sound principles of law," a call to each of us not to let our political persusions blind us to our duty in that regard.
1. Lynn v. Polk, 76 Tenn. at 227.